1 Gambling Laws In Pennsylvania Sergeant James A. Jones Jr. Corporal Rick Goodling Pennsylvania State Police Bureau of Liquor Control Enforcement

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Gambling Laws Gambling Laws In PennsylvaniaIn Pennsylvania

Sergeant James A. Jones Jr.Sergeant James A. Jones Jr.Corporal Rick GoodlingCorporal Rick Goodling

Pennsylvania State PolicePennsylvania State PoliceBureau of Liquor Control EnforcementBureau of Liquor Control Enforcement

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OverviewOverview

• What is Gambling?What is Gambling?

• Facts Facts

• The LawThe Law

• Final Thought & DiscussionFinal Thought & Discussion

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Legal vs. Illegal GamblingLegal vs. Illegal Gambling

• Currently, the authorized and only legal Currently, the authorized and only legal forms of gambling in Pennsylvania are:forms of gambling in Pennsylvania are:– Gambling activities conducted pursuant to the Gambling activities conducted pursuant to the

Horse Racing Industry Reform Act.Horse Racing Industry Reform Act.– Pennsylvania LotteryPennsylvania Lottery– Bingo conducted pursuant to the Bingo LawBingo conducted pursuant to the Bingo Law– Gambling activities conducted pursuant to the Gambling activities conducted pursuant to the

Local Option Small Games of Chance ActLocal Option Small Games of Chance Act– Gambling activities conducted pursuant to the Gambling activities conducted pursuant to the

Pennsylvania Race Horse Development and Pennsylvania Race Horse Development and Gaming Act (slots).Gaming Act (slots).

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WHAT TYPES OF WHAT TYPES OF ACTIVITIES ACTIVITIES

CONSTITUTE CONSTITUTE GAMBLING?GAMBLING?

““GAMBLING”GAMBLING”

• Legal DefinitionLegal Definition

• Behavioral DefinitionBehavioral Definition– Behavior is the same, however activity Behavior is the same, however activity

does not meet legal definition of gambling. does not meet legal definition of gambling. Chance vs. Skill. Chance vs. Skill.

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GAMBLINGGAMBLINGLegal DefinitionLegal Definition

• Gambling is not specifically defined by Gambling is not specifically defined by Statute in PennsylvaniaStatute in Pennsylvania

• Instead we have to refer to Court Cases Instead we have to refer to Court Cases to define gamblingto define gambling

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GAMBLINGGAMBLINGLegal DefinitionLegal Definition

THE PENNSYLVANIA COURTS HAVE THE PENNSYLVANIA COURTS HAVE DETERMINED THAT GAMBLING CONSISTS DETERMINED THAT GAMBLING CONSISTS OF THREE BASIC ELEMENTS:OF THREE BASIC ELEMENTS:(PLCB V. PPC CIRCUS BAR, INC.)(PLCB V. PPC CIRCUS BAR, INC.)

CONSIDERATIOCONSIDERATIONN

+ + CHANCECHANCE

++ REWARD REWARD ==

GAMBLINGAMBLINGG

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CONSIDERATIONCONSIDERATION• COST TO BEGIN PLAY OR EVENTCOST TO BEGIN PLAY OR EVENT– BETBET– WAGERWAGER

• EXAMPLESEXAMPLES– BLOCK PURCHASE IN POOLBLOCK PURCHASE IN POOL– ““BUY-IN” IN POKER TOURNAMENT BUY-IN” IN POKER TOURNAMENT – PURCHASE OF PULL TABPURCHASE OF PULL TAB– MONEY IN SLOT MACHINEMONEY IN SLOT MACHINE

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CHANCECHANCE• EVENT OUTCOME BASES WHOLLY OR EVENT OUTCOME BASES WHOLLY OR

PREDOMINANTLY ON CHANCEPREDOMINANTLY ON CHANCE– LITTLE OR NO SKILLLITTLE OR NO SKILL

• EXAMPLESEXAMPLES– ROLL OF DICE OR TURN OF CARDROLL OF DICE OR TURN OF CARD– RESULT OF RACE OR SPORTING EVENTRESULT OF RACE OR SPORTING EVENT

• SKILL – MOST ARGUED DEFENSESKILL – MOST ARGUED DEFENSE– TO BE CONSIDERED A SKILL, A PERSON WOULD HAVE TO BE CONSIDERED A SKILL, A PERSON WOULD HAVE

TO BE ABLE TO MASTER THE GAMETO BE ABLE TO MASTER THE GAME– DARTS, BILLIARDS, ETC.DARTS, BILLIARDS, ETC.– PLAYING POKER MAY INVOLVE SOME SKILL OR PLAYING POKER MAY INVOLVE SOME SKILL OR

KNOWLEDGE, HOWEVER THE CARDS ARE STILL DEALT KNOWLEDGE, HOWEVER THE CARDS ARE STILL DEALT RANDOMLYRANDOMLY

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REWARDREWARD• RETURN TO PLAYER FOR WINNING RETURN TO PLAYER FOR WINNING

EVENTEVENT– MAY BE CASH, MERCHANDISE, SERVICE MAY BE CASH, MERCHANDISE, SERVICE

OR ANYTHING OF VALUEOR ANYTHING OF VALUE

• IF VALUE OF PRIZE IS LESS THAN OR IF VALUE OF PRIZE IS LESS THAN OR EQUAL TO THE CONSIDERATION EQUAL TO THE CONSIDERATION THEN THE CONTEST IS NOT THEN THE CONTEST IS NOT GAMBLINGGAMBLING– E.G. DUCK POND GAMEE.G. DUCK POND GAME

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Common Unlawful Gambling Common Unlawful Gambling ActivitiesActivities

• Texas Hold’em TournamentsTexas Hold’em Tournaments• ““Night at the Races”Night at the Races”• ““50/50 Drawings”50/50 Drawings”• Casino NightsCasino Nights• Pools – football, basketball, NASCAR, etc.Pools – football, basketball, NASCAR, etc.• Chinese AuctionsChinese Auctions• ““Chuck-a-luck Wheel”Chuck-a-luck Wheel”• Video Gambling Devices - video poker or slotsVideo Gambling Devices - video poker or slotsNONE OF THESE ACTIVITIES ARE AUTHORIZED NONE OF THESE ACTIVITIES ARE AUTHORIZED

BY THE SMALL GAMES OF CHANCE ACTBY THE SMALL GAMES OF CHANCE ACT

Texas Hold’emTexas Hold’em•

Is it legal???Is it legal???

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Yes and NoYes and NoWhen is it lawful:When is it lawful:

U.S. ex rel. Yate v. Rundle, 326 F. Supp. 344U.S. ex rel. Yate v. Rundle, 326 F. Supp. 344

- States that casual wagering or the occasional playing of cards - States that casual wagering or the occasional playing of cards for money does not constitute an indictable offense. for money does not constitute an indictable offense.

-- A friendly “Neighborhood Game” between friendsA friendly “Neighborhood Game” between friends

- Between “Friends” does not mean at Joe’s garage - Between “Friends” does not mean at Joe’s garage

every Saturday and anyone can show and playevery Saturday and anyone can show and play

- The “House” - The “House” DOES NOT DOES NOT take a cut of the pot or take a cut of the pot or

accepts cash to get into the game for any reason. accepts cash to get into the game for any reason.

(ie.. For food, alcohol etc..) (ie.. For food, alcohol etc..)

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How to Bars and Clubs get away How to Bars and Clubs get away with itwith it

• Remember “Consideration and Remember “Consideration and Reward”????Reward”????

• For Bars and Clubs to lawfully allow Texas Hold’em:For Bars and Clubs to lawfully allow Texas Hold’em: - Allow you as the patron to enter the game with out any - Allow you as the patron to enter the game with out any

consideration (money). This includes paying a cover charge, consideration (money). This includes paying a cover charge, two drink minimum, having to buy the buffet etc..two drink minimum, having to buy the buffet etc..

- The Reward (winnings) is LESS THAN the Consideration (buy - The Reward (winnings) is LESS THAN the Consideration (buy in money). If the buy in is $20.00 and you can only win $15.00 in money). If the buy in is $20.00 and you can only win $15.00 this is a legal game. this is a legal game.

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Night at the RacesNight at the Races

• Usually used as a Fundraiser where a Usually used as a Fundraiser where a DVD, or Tape of an actual or simulated DVD, or Tape of an actual or simulated horse race is played and bets or horse race is played and bets or wagers are placed that are not in an wagers are placed that are not in an authorized Horse Racing facility. authorized Horse Racing facility.

• There are companies that sell Night at There are companies that sell Night at the Races “kits”the Races “kits”

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Legal or Illegal???Legal or Illegal???

Answer: IllegalAnswer: Illegal

• It is based solely on “Chance”. There is no skill involved in It is based solely on “Chance”. There is no skill involved in predicting the winner. predicting the winner.

HoweverHowever

• Could be legal if the wager is more than the reward. Could be legal if the wager is more than the reward. • (Example: you wager $10.00 but can only win $5.00) (Example: you wager $10.00 but can only win $5.00)

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““50/50 Drawings”50/50 Drawings”

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However:However:

When used to determine the outcome for When used to determine the outcome for a Small Games of Chance “Daily or a Small Games of Chance “Daily or Weekly” drawing, it could be legal. Weekly” drawing, it could be legal.

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Casino NightsCasino Nights

• Usually used as a FundraiserUsually used as a Fundraiser

• Usually consist of utilizing multiple Usually consist of utilizing multiple gambling games, poker, 50/50 tickets, gambling games, poker, 50/50 tickets, roulette etc.. to raise money.roulette etc.. to raise money.

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Again CHANCE, CONSIDERATION, REWARDAgain CHANCE, CONSIDERATION, REWARD

HoweverHowever

• Could be legal if the wager is more than the reward. Could be legal if the wager is more than the reward. • (Example: you wager $10.00 but can only win $5.00) (Example: you wager $10.00 but can only win $5.00)

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PoolsPools

• Football, Basketball, Nascar etc..Football, Basketball, Nascar etc..

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NCAA BracketsNCAA Brackets

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HoweverHowever

• Could be legal if the wager is more than the reward. Could be legal if the wager is more than the reward.

(Example: you wager $10.00 but can only win $5.00) (Example: you wager $10.00 but can only win $5.00)

• Buck Pools – Legal due to skill?Buck Pools – Legal due to skill?

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Chinese AuctionsChinese Auctions

• In a Chinese auction, bidders are not prospective buyers (as in the conventional English auction). Instead, they buy tickets, which are chances to win items. The tickets themselves are often as inexpensive as a penny, and bidders may buy hundreds of these tickets. Bidders buy as many tickets as they like, and bid them on any item(s) they want by placing one or more ticket in the "hat" beside the item(s) they are trying to win. At the conclusion of bidding, one winning ticket is drawn from the "hat" beside each item, and the item is given to the owner of that ticket.

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http://en.wikipedia.org/wiki/English_auction

http://en.wikipedia.org/wiki/Penny



HoweverHowever


(Example: you place $10.00 of tickets in hat but can only win (Example: you place $10.00 of tickets in hat but can only win $5.00 worth in prizes) $5.00 worth in prizes)

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Chuck-a-Luck WheelChuck-a-Luck Wheel

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HoweverHowever


(Example: you wager $10.00 but can only win $5.00) (Example: you wager $10.00 but can only win $5.00)

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Video Gambling DevicesVideo Gambling Devices

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PA Crimes CodePA Crimes Code

• § 5513. Gambling devices, gambling, etc. (a) Offense defined.--§ 5513. Gambling devices, gambling, etc. (a) Offense defined.--A person is guilty of a misdemeanor of the first degree if he: (1) A person is guilty of a misdemeanor of the first degree if he: (1) intentionally or knowingly makes, assembles, sets up, intentionally or knowingly makes, assembles, sets up, maintains, sells, lends, leases, gives away, or offers for sale, maintains, sells, lends, leases, gives away, or offers for sale, loan, lease or gift, any punch board, drawing card, slot machine loan, lease or gift, any punch board, drawing card, slot machine or any device to be used for gambling purposes, except playing or any device to be used for gambling purposes, except playing cards; (2) allows persons to collect and assemble for the cards; (2) allows persons to collect and assemble for the purpose of unlawful gambling at any place under his control; purpose of unlawful gambling at any place under his control; (3) solicits or invites any person to visit any unlawful gambling (3) solicits or invites any person to visit any unlawful gambling place for the purpose of gambling; or (4) being the owner, place for the purpose of gambling; or (4) being the owner, tenant, lessee or occupant of any premises, knowingly permits tenant, lessee or occupant of any premises, knowingly permits or suffers the same, or any part thereof, to be used for the or suffers the same, or any part thereof, to be used for the purpose of unlawful gambling. purpose of unlawful gambling.

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??????????

•SO is it legal for you as SO is it legal for you as the patron to play a the patron to play a video gambling video gambling device?device?

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• Answer : Yes. You as the patron cannot be arrested Answer : Yes. You as the patron cannot be arrested for playing a video gambling device.for playing a video gambling device.

What makes the video gambling devices illegal is the intentionally What makes the video gambling devices illegal is the intentionally or knowingly makes, assembles, sets up, maintains, sells, or knowingly makes, assembles, sets up, maintains, sells, lends, leases, gives away, or offers for sale, loan, lease or gift, lends, leases, gives away, or offers for sale, loan, lease or gift, any slot machine or any device to be used for gambling any slot machine or any device to be used for gambling purposes, except playing cards; (2) allows persons to collect purposes, except playing cards; (2) allows persons to collect and assemble for the purpose of unlawful gambling at any and assemble for the purpose of unlawful gambling at any place under his control; (3) solicits or invites any person to place under his control; (3) solicits or invites any person to visit any unlawful gambling place for the purpose of gambling; visit any unlawful gambling place for the purpose of gambling; or (4) being the owner, tenant, lessee or occupant of any or (4) being the owner, tenant, lessee or occupant of any premises, knowingly permits or suffers the same, or any part premises, knowingly permits or suffers the same, or any part thereof, to be used for the purpose of unlawful gambling. thereof, to be used for the purpose of unlawful gambling.

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So how do we seize unlawful So how do we seize unlawful gambling devices?gambling devices?

- Receive a payout on the device- Receive a payout on the device

- Observe a payout on the device- Observe a payout on the device

- Get a confession that they are being used for unlawful - Get a confession that they are being used for unlawful gambling purposesgambling purposes

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How do we seize unlawful How do we seize unlawful gambling devices without proving gambling devices without proving

their paying out on them?their paying out on them?

• Case LawCase Law

• Remember Chance, Remember Chance, Consideration, RewardConsideration, Reward

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Case LawCase Law• Commonwealth v. Kevin G. Dumont, 536 A.2d 342 (Pa.Super. 1987). This is the controlling

case which sets forth the criteria which the Bureau must satisfy in order to seize a video gambling device. The Court held that “probable cause” is to be determined using a flexible common sense standard, and the Bureau does not need to prove the three elements of gambling prior to seizure. Officers must demonstrate that the game is “set up” for play, that it accepts U.S. currency (consideration), that its game result is determined primarily by chance (not by skill), and that as articulated by the Court, a knock-off device allows accumulated points to be erased.

• Commonwealth v. Two Electronic Poker Game Machines, 465 A.2d 973 (Pa. 1983). The court held that the key determination in deciding whether a video gaming device was an amusement device (legal) or an unlawful gambling device, was to evaluate it against the three traditional elements of gambling: consideration, chance and reward. If the video gaming device required consideration to play; if the result of the game was determined primarily by chance; and if there was a reward for winning, then the video gaming device would be considered so “intrinsically connected to gambling as to constitute a gambling device per se.” In this case, the issue was not “consideration” or “chance”. The issue focused on the question of “reward.” In cases where the Bureau must prove “reward” through circumstantial evidence, the Pennsylvania Supreme Court provided a specific test.

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Internet CafesInternet Cafes

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DefinitionDefinitionA sweepstakes parlor (or sweepstakes cafe) is an

establishment that offers games of chance with prizes in conjunction with other services, like Internet access or telephone cards.[1] Although often seen as gambling, owners of sweepstakes parlors claim to operating under sweepstakes law and thus legal because the winners are predetermined and the entries are offered in conjunction with the purchase of a product. According to such laws sweepstakes parlors do not meet a 3 prong test for gambling:

1. prize

2. chance

3. consideration

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http://en.wikipedia.org/wiki/Internet_cafe

http://en.wikipedia.org/wiki/Telephone_card

http://en.wikipedia.org/wiki/Gambling

http://en.wikipedia.org/wiki/Sweepstakes

Games on SweepstakesGames on Sweepstakes

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Actual Café in PAActual Café in PA

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B I N G OB I N G O

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Bingo ActBingo Act• “Bingo” is identified as a game in which each player has a card or board

containing five horizontal rows, all but the central one containing five figures. The central row has four figures with the word “free” marked in the center thereof. Any pre-announced combination of spaces when completed by a player constitutes bingo. In the absence of a preannouncement of a combination of spaced, any combination of five in a row whether horizontal or vertical when completed by a player constitutes bingo when its numbers are announced and covered. A wheel or other mechanical device may be used by any person conducting the game of bingo, and any such person may award a prize to any player or players first completing any combination constituting bingo.

• • NOTE: Any deviation from this definition, such as video bingo or instant bingo

ticket does not meet the above definition and are not approved games under the Bingo Act.

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Bingo ActBingo Act

• Under Title 40, Section 5.32-4(i)(ii), bingo can be conducted as an event/tournament/or contest on any licensed premises as long as the association that holds the bingo permit is a bona fide charitable organization registered with the Pennsylvania Department of State.

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RequirementsRequirementsEach bingo permit allows for bingo to be conducted two times a week. A facility can host up to two bingo permits for a total of four bingo sessions per week. In addition, an association shall be further permitted to conduct the game of bingo for a period not to exceed ten days at the association’s exposition, carnival, or fair site.

Each association shall keep written records of the total proceeds collected, the total prize money distributed, the total value of all merchandise awarded as a prize, and the amount of moneys paid as rentals or wages, and to whom such rentals or wages were paid. All prizes awarded having a value greater than $250.00 shall be specifically described in the association’s records.

Prizes awarded shall not exceed a value of $250.00 for any one game of bingo, except for jackpot games, which shall not exceed a value of $2,000.00 for one such game. In addition, no more than $4,000.00 in prizes shall be awarded in any calendar day.

Each association shall deposit with a financial institution all proceeds for each day’s bingo game in an account in the association’s name. This deposit shall be made before any of the proceeds may be used for any other purpose, except for payment of prize money and compensation to members employed in the operation of the game.

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BingoBingo• Funds derived from the operation of the game of bingo are to be used to support the non-

profit purposes of the association.

• No association shall permit any person who is not a bona fide member of the association or who has been convicted of a felony or a violation of this act to manage, set up, supervise or participate in the operation of the association’s bingo games. Nothing contained in this act shall be construed to prohibit individuals under 18 years of age from participating in the operation of the game and being compensated if written permission is obtained from their parent or guardian.

• No person shall participate in the operation of bingo games on more than four days in any calendar week, except at expositions, carnivals, or fairs where merchandise is being awarded as a prize.

• No person may be employed in the operation or the actual running of a bingo game for compensation greater than $50.00 per day, except employees of outside operators. Any person compensated shall be paid individually by check or by cash, in which case the payee shall sign a written receipt. In addition, no person shall receive compensation from more than one source for services rendered in the operation of a bingo game.

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BingoBingo• No person under the age of 18 shall be permitted to play bingo unless accompanied by an

adult.

• Only associations licensed to conduct bingo shall be permitted to advertise their bingo games. Such advertisements shall contain the date, time, location, whether cash or merchandise prizes will be awarded, and the name of the association licensed to conduct the bingo game and the name of the individual in charge of the operation of the game. An association shall not advertise the prizes which will be awarded, or their dollar value, nor shall they advertise a guaranteed prize dollar value.

• The association shall own both the premises upon with the bingo is played and the personal property used in the conduct of the game, or shall sign a written agreement leasing such premises or personal property from the owner for a fee. The fee may not be determined by either the amount of receipts realized from the playing of bingo or the number of people attending bingo games. An association shall not lease such premises or personal property from any person who has been convicted of a felony of a violation of the Bingo Act.

• No supplier of merchandise, nor any person who has been convicted of a felony or a violation of this act, shall have a pecuniary interest in the operation of or proceeds from the bingo game.

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Electronic BingoElectronic Bingo

Legal or Illegal?Legal or Illegal?

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Electronic BingoElectronic Bingo

• Answer: IllegalAnswer: Illegal

• This is a unlawful gambling device This is a unlawful gambling device disguised as a Bingo machine. disguised as a Bingo machine.

• No skill, push a button, win or loose.No skill, push a button, win or loose.

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THE SMALL GAMES THE SMALL GAMES OF CHANCE ACTOF CHANCE ACT

Gateway to gambling?Gateway to gambling?

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ORIGIN AND PURPOSEORIGIN AND PURPOSE

• The Pennsylvania Local Option Small Games of The Pennsylvania Local Option Small Games of Chance Act (the Act) was passed in 1988.Chance Act (the Act) was passed in 1988.

• The Act permits certain eligible organizations, “to The Act permits certain eligible organizations, “to conduct small games of chance for the purpose of conduct small games of chance for the purpose of raising funds for the promotion of public interest raising funds for the promotion of public interest purposes.purposes.

• The Department of Revenue promulgates regulations The Department of Revenue promulgates regulations pursuant to the Act .pursuant to the Act .

• Significant changes made by Act 2 of 2012.Significant changes made by Act 2 of 2012.

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LEGISLATIVE INTENTLEGISLATIVE INTENT§ 312. § 312. Legislative intentLegislative intent

The General Assembly hereby declares that the playing of small games of The General Assembly hereby declares that the playing of small games of chance for the purpose of raising funds, by certain nonprofit chance for the purpose of raising funds, by certain nonprofit associations, associations, for the promotion of charitable or civic purposesfor the promotion of charitable or civic purposes, is in the , is in the public interest. public interest. In some cases the proceeds from games of chance may be utilized to support certain operating expenses of certain organizations.

It is hereby declared to be the policy of the General Assembly that all It is hereby declared to be the policy of the General Assembly that all phases of licensing, operation and regulation of small games of chance phases of licensing, operation and regulation of small games of chance be be strictly controlledstrictly controlled, and that all laws and regulations with respect , and that all laws and regulations with respect thereto as well as all gambling laws thereto as well as all gambling laws should be strictly construed and should be strictly construed and rigidly enforced.rigidly enforced.

The General Assembly recognizes the possibility of association between The General Assembly recognizes the possibility of association between commercial gambling and organized crime, and wishes to discourage commercial gambling and organized crime, and wishes to discourage commercialization of small games of chance, prevent participation by commercialization of small games of chance, prevent participation by organized crime and prevent the diversion of funds from the purposes organized crime and prevent the diversion of funds from the purposes herein authorized.herein authorized.

(EMPHASIS ADDED)(EMPHASIS ADDED)

TYPES OF LICENSESTYPES OF LICENSES• ““Regular” License Regular” License – issued to eligible organizations which – issued to eligible organizations which

own their own premise or lease a specific location to own their own premise or lease a specific location to conduct normal business. Permits holders to operate conduct normal business. Permits holders to operate SGOC during entire licensing year.SGOC during entire licensing year.

• Limited Occasion License Limited Occasion License – issued to eligible – issued to eligible organizations which organizations which do not do not own their own premises or own their own premises or which do not lease a specific location to conduct their which do not lease a specific location to conduct their normal business.normal business.– no more than three occasions covering a total of seven days a no more than three occasions covering a total of seven days a

year.year.– no more than two raffles during a licensed year where prizes may no more than two raffles during a licensed year where prizes may

not exceed the established limits for regular monthly raffles. not exceed the established limits for regular monthly raffles.

•

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OPERATION OF GAMESOPERATION OF GAMES

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• Only licensed eligible organizations or Only licensed eligible organizations or auxiliary group managers, officers, directors, auxiliary group managers, officers, directors, bar personnel or bona fide members of the bar personnel or bona fide members of the licensed eligible organization may conduct licensed eligible organization may conduct games of chance.games of chance.

• A person may not be compensated A person may not be compensated conducting games of chance.conducting games of chance.– Example: seller of winning ticket wins a prize or a Example: seller of winning ticket wins a prize or a

prize is provided to the top ticket seller. prize is provided to the top ticket seller.

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PERMITTED GAMESPERMITTED GAMES

• The Act is very specific as to the games of The Act is very specific as to the games of chance that are permitted. They are:chance that are permitted. They are:– PunchboardsPunchboards– Pull-TabsPull-Tabs– Raffles (including lotteries)Raffles (including lotteries)– Daily DrawingsDaily Drawings– Weekly DrawingsWeekly Drawings

NO OTHER GAMES ARE PERMITTEDNO OTHER GAMES ARE PERMITTED

BY THE ACTBY THE ACT

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OPERATION OF GAMESOPERATION OF GAMES(CONTINUED)(CONTINUED)

• No person under the age No person under the age of 18 may operate or of 18 may operate or participate in S.G.O.C.participate in S.G.O.C.

• No one visibly No one visibly intoxicated may intoxicated may purchase or sell a purchase or sell a chance.chance.

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• An officer or employee of a An officer or employee of a clubclub licensee licensee who operates a game of chance shall not who operates a game of chance shall not participate in the game. participate in the game. [§502(B)(2)] [§502(B)(2)]

– This This does not apply to a raffle. does not apply to a raffle.

• Interpretation of subsection 502(B)(2):Interpretation of subsection 502(B)(2):– The apparent intent of this subsection of the Act is to The apparent intent of this subsection of the Act is to

prohibit persons with inside knowledge, influence or control prohibit persons with inside knowledge, influence or control of a game from participating in that game in an effort to of a game from participating in that game in an effort to prevent any fraudulent or criminal activities. prevent any fraudulent or criminal activities.

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• No person who has be convicted of a No person who has be convicted of a Felony within the last five years or of a Felony within the last five years or of a violation of the S.G.O.C. Act or Bingo Act violation of the S.G.O.C. Act or Bingo Act within the past ten years may:within the past ten years may:

– Manage S.G.O.C.Manage S.G.O.C.– Set-up S.G.O.C.Set-up S.G.O.C.– Supervise S.G.O.C.Supervise S.G.O.C.– Participate in the operation of S.G.O.C.Participate in the operation of S.G.O.C.

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• No person under the age No person under the age of 18 may operate or of 18 may operate or participate in S.G.O.C.participate in S.G.O.C.

• No one visibly No one visibly intoxicated may intoxicated may purchase or sell a purchase or sell a chance.chance.

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USE OF PROCEEDSUSE OF PROCEEDS

USE OF PROCEEDSUSE OF PROCEEDS

PROCEEDSPROCEEDS - Defined in the Act as the - Defined in the Act as the difference between:difference between:– the actual gross revenue collected by a licensed the actual gross revenue collected by a licensed

eligible organization from a game of chance; andeligible organization from a game of chance; and– the actual amount of prizes paid by a licensed the actual amount of prizes paid by a licensed

eligible organization from a game of chance, plus eligible organization from a game of chance, plus the cost to purchase games of chance.the cost to purchase games of chance.

Proceeds are to be maintained in a Proceeds are to be maintained in a

Separate bank account.Separate bank account.

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USE OF PROCEEDSUSE OF PROCEEDS(CONTINUED)(CONTINUED)

• The proceeds from the operation of The proceeds from the operation of small games of chance may be used small games of chance may be used onlyonly for three purposes: for three purposes:– purchase of small games of chance.purchase of small games of chance.– public interest purposes.public interest purposes.– Certain operating expenses of certain Certain operating expenses of certain

eligible organizations.eligible organizations.

• Public interest purposes are defined in Public interest purposes are defined in the Act as:the Act as:

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1.1. The activities and operations of a nonprofit The activities and operations of a nonprofit benevolent, religious, educational, benevolent, religious, educational, philanthropic, humane, scientific, patriotic, philanthropic, humane, scientific, patriotic, social welfare, social advocacy, public health, social welfare, social advocacy, public health, public safety, emergency response, public safety, emergency response, environmental or civic objective.environmental or civic objective.

2.2. Initiating, performing or fostering worthy Initiating, performing or fostering worthy public works or enabling or furthering the public works or enabling or furthering the erection or maintenance of public structures. erection or maintenance of public structures.

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3.3. Lessening the burdens borne by government Lessening the burdens borne by government or voluntarily supporting, augmenting or or voluntarily supporting, augmenting or supplementing services which the supplementing services which the government would normally render to the government would normally render to the people. people.

4.4. Improving, expanding, maintaining or Improving, expanding, maintaining or repairing real property owned or leased by an repairing real property owned or leased by an eligible organization and relating operational eligible organization and relating operational expenses used for purposes specified in expenses used for purposes specified in paragraphs (1), (2) and (3).paragraphs (1), (2) and (3).– The term does not include the erection or The term does not include the erection or

acquisition of any real property, unless the acquisition of any real property, unless the property will be used property will be used exclusivelyexclusively for one or more for one or more of the purposes specified in this definition. of the purposes specified in this definition.

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USE OF PROCEEDSUSE OF PROCEEDSCLUB LICENSEESCLUB LICENSEES

The proceeds from games of chance received The proceeds from games of chance received by a by a clubclub licensee shall be distributed as licensee shall be distributed as follows:follows:– No less than 70% of the proceeds shall be paid to No less than 70% of the proceeds shall be paid to

organizations for public interest purposes in the organizations for public interest purposes in the calendar year in which the proceeds were calendar year in which the proceeds were obtained.obtained.

– No more than 30% of the proceeds obtained in a No more than 30% of the proceeds obtained in a calendar year may be retained by a club licensee calendar year may be retained by a club licensee and used for certain operational expenses relating and used for certain operational expenses relating to the club licensee.to the club licensee.

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• Approved “operational expenses”:Approved “operational expenses”:– Real property taxes.Real property taxes.– Utility and fuel costs.Utility and fuel costs.– Heating and air conditioning equipment or repair costs.Heating and air conditioning equipment or repair costs.– Water and sewer costs.Water and sewer costs.– Property or liability insurance costs.Property or liability insurance costs.– Mortgage payments.Mortgage payments.– Interior and exterior repair costs, including repair to parking Interior and exterior repair costs, including repair to parking

lots.lots.– New facility construction costs.New facility construction costs.– Entertainment equipment, including television, video and Entertainment equipment, including television, video and

electronic games.electronic games.

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• PROCEEDS FROM SGOC SHALL PROCEEDS FROM SGOC SHALL NOTNOT BE UTILIZED FOR:BE UTILIZED FOR:– WAGESWAGES– ALCOHOL OR FOOD PURCHASESALCOHOL OR FOOD PURCHASES– FOR THE PAYMENT OF ANY FINE LEVIED FOR THE PAYMENT OF ANY FINE LEVIED

AGAINST THE CLUB LICENSEE.AGAINST THE CLUB LICENSEE.

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EXAMPLES OF “PUBLIC EXAMPLES OF “PUBLIC INTEREST PUPOSE” EXPENSESINTEREST PUPOSE” EXPENSES

• Support of youth programs Support of youth programs – e.g. sports, youth centers, etc.e.g. sports, youth centers, etc.

• Donations to food pantriesDonations to food pantries• Community projectsCommunity projects• Donation to Donation to certaincertain charitable or non-profit charitable or non-profit

organizationsorganizations– ““Non-profit” does not necessarily indicate an Non-profit” does not necessarily indicate an

organization serves a “public interest purpose.”organization serves a “public interest purpose.”• Purchase of fire and rescue equipmentPurchase of fire and rescue equipment

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PRIZE LIMITSPRIZE LIMITS

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PRIZE LIMITSPRIZE LIMITS

• General Prize limits – All games of General Prize limits – All games of chance EXCEPT weekly drawings:chance EXCEPT weekly drawings:

– $1,000 for single chance.$1,000 for single chance.– $25,000 total for operating week.$25,000 total for operating week.

• Listed in the Act as the “Aggregate Prize Limit”Listed in the Act as the “Aggregate Prize Limit”

• Weekly drawings are only limited by the Weekly drawings are only limited by the $25,000 weekly limit.$25,000 weekly limit.

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PRIZE LIMITSPRIZE LIMITS(CONTINUED)(CONTINUED)

• Prize limit for raffles:Prize limit for raffles:– $10,000 per month$10,000 per month

• Exception – Special Raffles Exception – Special Raffles – $100,000 per year. $100,000 per year. ($150,000 for certain organizations)($150,000 for certain organizations)

– No $1,000 limit on individual chance.No $1,000 limit on individual chance.– Not added to weekly prize total.Not added to weekly prize total.– Not available to Limited Occasion Licensees.Not available to Limited Occasion Licensees.

• There are other exceptions for Daily and There are other exceptions for Daily and Weekly Drawing prizes under specific Weekly Drawing prizes under specific circumstances.circumstances.

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DISCUSSION OF DISCUSSION OF INDIVIDUAL GAMESINDIVIDUAL GAMES

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DAILY DRAWINGSDAILY DRAWINGS

• Term includes Sign-in Drawings and Half-and Term includes Sign-in Drawings and Half-and Half Drawings.Half Drawings.

• Requirements:Requirements:– Chances may only be purchased by Chances may only be purchased by bona fide bona fide

members.members.– May only be sold on the licensed premises.May only be sold on the licensed premises.– No more than $1 per chance.No more than $1 per chance.– No more than one chance per member.No more than one chance per member.– Drawing MUST be conducted during same Drawing MUST be conducted during same

operating day in which chances were sold.operating day in which chances were sold.– No requirement that person be present.No requirement that person be present.

• May not reduce prize if winner is not present .(May not reduce prize if winner is not present .(§901.784)§901.784)

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DAILY DRAWINGSDAILY DRAWINGS(CONTINUED)(CONTINUED)

• BONA FIDE MEMBERBONA FIDE MEMBER– Any individual who holds a membership in Any individual who holds a membership in

the eligible organization as defined by that the eligible organization as defined by that organization's constitution, charter, organization's constitution, charter, articles of incorporation or bylaws. articles of incorporation or bylaws. • Social members may or may not be “bona fide Social members may or may not be “bona fide

members.”members.”• Ensure by-laws permit social members.Ensure by-laws permit social members.• In most cases, bona fide members have voting In most cases, bona fide members have voting

rights and may hold office.rights and may hold office.

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• Daily Drawing prize limitsDaily Drawing prize limits– Generally subject to $1,000/chance limit Generally subject to $1,000/chance limit

and prizes are added when calculating and prizes are added when calculating $25,000/week prize limit.$25,000/week prize limit.

– EXCEPTIONS:EXCEPTIONS:• Prize may exceed the $1,000 per chance limit if Prize may exceed the $1,000 per chance limit if

a portion of the prize is a “carryover” of a a portion of the prize is a “carryover” of a drawing with drawing with nono winner. winner.

• Not applicable if no drawing is held or if Not applicable if no drawing is held or if chances are sold for more than $1.chances are sold for more than $1.

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• PRIZE LIMIT EXCEPTIONS PRIZE LIMIT EXCEPTIONS (continued)(continued)

– Prizes in daily drawings may cause an Prizes in daily drawings may cause an organizations prize total to exceed the organizations prize total to exceed the $25,000 weekly limit if the drawing is set up $25,000 weekly limit if the drawing is set up to pay out 100% of the gross revenues. to pay out 100% of the gross revenues. • In this case, the prizes are not added to the In this case, the prizes are not added to the

weekly total.weekly total.• Such prizes may not, however, exceed the $1,000 Such prizes may not, however, exceed the $1,000

per chance limit unless it is paid pursuant to a per chance limit unless it is paid pursuant to a “carryover” drawing.“carryover” drawing.

– The rules of the game must be prominently The rules of the game must be prominently displayed.displayed.

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WEEKLY DRAWINGSWEEKLY DRAWINGS

• Requirements:Requirements:– Chances may only be purchased by Chances may only be purchased by bona fide bona fide

members.members.– May only be sold on the licensed premises.May only be sold on the licensed premises.– No more than $1 per chance.No more than $1 per chance.– One drawing per operating week.One drawing per operating week.

• Drawing MUST be conducted during same operating Drawing MUST be conducted during same operating week in which chances were sold.week in which chances were sold.

– More than one chance per member permitted.More than one chance per member permitted.– No requirement that person be present.No requirement that person be present.

• May not reduce prize if winner is not present.May not reduce prize if winner is not present.

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WEEKLY DRAWINGSWEEKLY DRAWINGS(CONTINUED)(CONTINUED)

• Weekly Drawing prize limits:Weekly Drawing prize limits:– Prize Prize may may exceed $1,000 per chance limit.exceed $1,000 per chance limit.– Generally prizes in a weekly drawing are added Generally prizes in a weekly drawing are added

when calculating weekly prized totals. ($25,000 when calculating weekly prized totals. ($25,000 per week limit.)per week limit.)

– EXCEPTIONEXCEPTION• A weekly drawing may also exceed the $25,000 prize A weekly drawing may also exceed the $25,000 prize

limit if it is limit if it is set upset up to pay out 100% of the revenues to pay out 100% of the revenues generated.generated.– In this case, the prizes are not added when calculating the In this case, the prizes are not added when calculating the

organization’s weekly prize total.organization’s weekly prize total.

• Not applicable if chances are sold for more than $1.Not applicable if chances are sold for more than $1.

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PUNCHBOARDSPUNCHBOARDSA Punchboard must comply with the A Punchboard must comply with the

following:following:– Must be purchased from licensed distributor.Must be purchased from licensed distributor.– Minimum 60% payout.Minimum 60% payout.– Winning punchboard plays should be Winning punchboard plays should be

perforated, punched or marked when perforated, punched or marked when redeemed.redeemed.

– Prize for individual punch may not exceed Prize for individual punch may not exceed $1,000.$1,000.

– Flare provided by manufacturer must be Flare provided by manufacturer must be unaltered and on display.unaltered and on display.• Substitute flare may be displayed if it meets all Substitute flare may be displayed if it meets all

requirements.requirements.

– All winners must be predetermined by the All winners must be predetermined by the manufacturer manufacturer

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PULL-TABSPULL-TABS• A pull-tab deal must comply with the A pull-tab deal must comply with the

following:following:– Must be purchased from licensed Must be purchased from licensed

distributor.distributor.– Minimum 65% payout.Minimum 65% payout.– Prize for individual pull-tab may not exceed Prize for individual pull-tab may not exceed

$1,000.$1,000.– Flare provided by manufacturer must be Flare provided by manufacturer must be

unaltered and on display.unaltered and on display.• Substitute flare may be displayed if it meets Substitute flare may be displayed if it meets

all requirements.all requirements.

– No more than 4,000 pull-tabs per deal.No more than 4,000 pull-tabs per deal.– Only one flare displayed per deal.Only one flare displayed per deal.– Winners and prizes must be predetermined Winners and prizes must be predetermined

by the manufacturer.by the manufacturer.

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PULL-TABSPULL-TABS(CONTINUED)(CONTINUED)

– Winning pull-tabs should be Winning pull-tabs should be perforated, punched or marked perforated, punched or marked when redeemed.when redeemed.

Tip Boards are a form of pull-tabTip Boards are a form of pull-tab– Must meet all requirements for Must meet all requirements for

pull-tabs.pull-tabs.– Prizes must be predetermined by Prizes must be predetermined by

manufacturer.manufacturer.

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RAFFLESRAFFLES• Two types:Two types:

– Regular RaffleRegular Raffle• Prizes counted towards $25,000 weekly limit.Prizes counted towards $25,000 weekly limit.

• Limited to $10,000 per month in prizes.Limited to $10,000 per month in prizes.

– Special Permit RaffleSpecial Permit Raffle• Licensed organizations may apply for eight per year.Licensed organizations may apply for eight per year.

– Ten for fire, ambulance and rescue organizations.Ten for fire, ambulance and rescue organizations.

• May award a total of $100,000 in prizes per year total.May award a total of $100,000 in prizes per year total.– $150,000 for fire, ambulance and rescue organizations.$150,000 for fire, ambulance and rescue organizations.

• Prizes do not count towards weekly prize limits.Prizes do not count towards weekly prize limits.

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RAFFLESRAFFLES(CONTINUED)(CONTINUED)

• Both types of raffles must comply with the Both types of raffles must comply with the following:following:– TicketsTickets

• Must be sequentially numbered and have a detachable Must be sequentially numbered and have a detachable stub with the same number.stub with the same number.

• Must be accounted for by the use of a logbook showing Must be accounted for by the use of a logbook showing to whom they were given to be sold.to whom they were given to be sold.

• Stub must contain the purchaser’s name address and Stub must contain the purchaser’s name address and phone number.phone number.

• Must contain:Must contain:– The date time and location of drawingThe date time and location of drawing– The name of the licenseeThe name of the licensee– SGOC license number SGOC license number – Special raffle permit number if applicable. Special raffle permit number if applicable.

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RAFFLESRAFFLES(CONTINUED)(CONTINUED)

– Tickets (con’t)Tickets (con’t)• Must list the cost of the ticket and the available prizes.Must list the cost of the ticket and the available prizes.

• There There mustmust be a winner in a raffle. be a winner in a raffle.• Drawing must be conducted in plain view of players Drawing must be conducted in plain view of players

present.present.– Use of state lottery number is permissible.Use of state lottery number is permissible.

• Only when tickets sales equal the total possible numbers. Only when tickets sales equal the total possible numbers. • E.g. 1000 tickets must be sold to utilize the daily number.E.g. 1000 tickets must be sold to utilize the daily number.

• Winners need not be present.Winners need not be present.• Tickets do not have to be purchased from licensed Tickets do not have to be purchased from licensed

distributors.distributors.

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LICENSED PREMISES AND LICENSED PREMISES AND LOCATION OF GAMESLOCATION OF GAMES

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• GENERAL RULEGENERAL RULE–Games of chance may only be Games of chance may only be

conducted on the licensed eligible conducted on the licensed eligible organizations licensed premises.organizations licensed premises.• Address / location on SGOC license.Address / location on SGOC license.• Eligible organization may not share the Eligible organization may not share the

same premise.same premise.– One license per location.One license per location.

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(CONTINUED)(CONTINUED)

• When a premises exists, the eligible When a premises exists, the eligible organization shall identify its licensed organization shall identify its licensed premises on its license application.premises on its license application.

– When a premises consists of more than one When a premises consists of more than one building, the organization must indicate the building, the organization must indicate the specific building where the game will be specific building where the game will be conducted.conducted.

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• When a organization does not own or lease When a organization does not own or lease a specific location to conduct its normal a specific location to conduct its normal business, they may obtain a Limited business, they may obtain a Limited Occasion License and utilize another Occasion License and utilize another licensed (SGOC) organization’s premises licensed (SGOC) organization’s premises to conduct games or enter into a written to conduct games or enter into a written lease agreement at an unlicensed location.lease agreement at an unlicensed location.– In cases were an organization uses the premises of In cases were an organization uses the premises of

another, the “host” organization may not operate another, the “host” organization may not operate SGOC at the same time.SGOC at the same time.



• A licensed eligible organization may A licensed eligible organization may not permit another licensed eligible not permit another licensed eligible organization holding a SGOC license to organization holding a SGOC license to conduct games of chance on their conduct games of chance on their licensed premise.licensed premise.– Does not apply to limited occasion Does not apply to limited occasion

licensees.licensees.

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• EXCEPTIONSEXCEPTIONS– Raffle tickets may be sold in any Raffle tickets may be sold in any

municipality that has approved a municipality that has approved a small games of chance referendum.small games of chance referendum.• If an licensed organization plans to sell If an licensed organization plans to sell

raffle tickets in a county other than raffle tickets in a county other than that in which it is licensed, they must that in which it is licensed, they must notify the District Attorney and notify the District Attorney and licensing authority of the other county licensing authority of the other county as to the dates and location of sales.as to the dates and location of sales.

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• EXCEPTIONS: EXCEPTIONS: (CONTINUED)(CONTINUED)

– Annual Carnivals, Fairs, Picnics or BanquetsAnnual Carnivals, Fairs, Picnics or Banquets• A licensed eligible organization may conduct games

of chance at a location off its premises when they are part of an annual carnival, fair, picnic or banquet held or participated in by that licensed eligible organization on a historical basis. – Notification in writing to the district attorney and licensing

authority.– Notification must include the location, date and times of Notification must include the location, date and times of

the event.the event.

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ENFORCEMENTENFORCEMENT

• District Attorneys and other law District Attorneys and other law enforcement officials investigate enforcement officials investigate criminal violations of the Act.criminal violations of the Act.

• The Act provides for criminal penalties The Act provides for criminal penalties and SGOC permit suspensions for and SGOC permit suspensions for violations.violations.

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PENALTIESPENALTIESEligible organizationsEligible organizations• An eligible organization violating the act is An eligible organization violating the act is

guilty of a summary offense, and shall pay a guilty of a summary offense, and shall pay a fine of up to $1000 and:fine of up to $1000 and:– 11stst offense – forfeit its license for remainder of offense – forfeit its license for remainder of

the license term or six months, whichever is the license term or six months, whichever is longer.longer.

– 22ndnd or subsequent offense - forfeit its license for or subsequent offense - forfeit its license for the remainder of the license term and be ineligible the remainder of the license term and be ineligible to be licensed for the following license termto be licensed for the following license term

– 33rdrd or subsequent offense, forfeit its license and or subsequent offense, forfeit its license and be ineligible for a license renewal for 30 months be ineligible for a license renewal for 30 months thereafter.thereafter.

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In Conclusion…In Conclusion…• Gambling is a growing problem in Gambling is a growing problem in

PennsylvaniaPennsylvania• The problem is exacerbated by The problem is exacerbated by

improper Small Games of Chance improper Small Games of Chance activity.activity.

• Eligible organizations have a Eligible organizations have a responsibility to adhere to all laws and responsibility to adhere to all laws and regulations.regulations.

• Awareness is the keyAwareness is the key

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QUESTIONS?QUESTIONS?

Documents

1 Gambling Laws In Pennsylvania Sergeant James A. Jones Jr. Corporal Rick Goodling Pennsylvania State Police Bureau of Liquor Control Enforcement